Freight trucking startup Shipwell gets a $10 million boost

Shipwell, a startup pitching a marketplace for domestic ground shipping and fleet and cargo management services for freight trucking companies, has raised $10 million in a new round of funding. A booming American economy coupled with failing infrastructure and a low-margin business reluctant to adopt new technologies have put stress on domestic logistics companies in the […]

Shipwell, a startup pitching a marketplace for domestic ground shipping and fleet and cargo management services for freight trucking companies, has raised $10 million in a new round of funding.

A booming American economy coupled with failing infrastructure and a low-margin business reluctant to adopt new technologies have put stress on domestic logistics companies in the $900 billion market for U.S. trucking services.

Shipwell combines a marketplace for shippers to connect with freight companies and online tools to manage those shipments. In effect, the company is pitching a version of the proprietary logistics management toolkit that has made Amazon so successful, to any retailer or outlet. 

We coordinate the freight, we pay the truckers, we help optimize the fleets,” says Shipwell president and co-founder, Jason Traff. 

Those services — and the company’s growing business among small and medium-sized suppliers to the construction industry — brought the Austin-based company to the attention of Fifth Wall Ventures, the Los Angeles based investment firm whose limited partners are among the biggest construction companies in the world.

For Fifth Wall the opportunity was clear. “Shipwell’s full-service, digitized brokerage platform can streamline the way many of our Anchor LPs and portfolio companies approach large-scale freight shipping,” the firm’s principal — and newest Shipwell board member — Vik Chawla wrote in a blog post announcing its most recent deal.

Fifth Wall led the company’s Series A round, which also included the new investor Global Founders Capital and previous investors First Round Capital, Base 10 Ventures, Capital Theory and Village Global .

The company’s business isn’t for big shippers that deal with thousands of shipments per-day, but rather the small and medium sized businesses that spend $100 million or less per-year on freight. And the small-fleet shipping companies that make up the bulk of the industry.

“In addition to the obvious use case for Shipwell customers who own warehousing, landlords can use Shipwell to become effective facilitators for their tenants,” according to Chawla. “Some Anchor LPs [the limited partners that provide capital for Fifth Wall to invest] are already engaged in this shipping ecosystem on behalf of their tenants, while others act as transport hubs. Beyond these, however, there are easy tie-ins within a number of key categories of Fifth Wall Anchors [sic] that regularly ship or receive freight—developers, of course, but also retail, office, homebuilding anchors.”

“We focus on the longer tail. If you are doing $50 million in freight per-year then you’re doing dozens of shipments per week,” said Traff. “Most of our freight is less than a truckload or a full truckload freight and it’s more long-haul.”

It hasn’t been a straight road for Traff and his co-founder Gregory Price. Traff originally got the startup bug in Asia, where he launched a company that would sell low-cost copies of old masters paintings. When he sold that business he moved back to the U.S. and pitched an idea to Y Combinator that eventually became Leaky, a car insurance company.

When Leaky shut down and its business was acquired by Navion in 2013, Traff moved to Austin to figure out his next move.I t was there that he ran into a fellow Massachusetts Institute of Technology alumnus named Greg Price and the two began hatching schemes for the company that would become Shipwell.

The two men began planning the business in 2016 and only launched the service in the beginning of this year. “Supply chains were very complex and there was a lot of building to do,” Traff said. 

Shipwell makes money by charging a commission on freight services and fees for its freight management software platform.

Ultimately this could create a new model to unify a fragmented industry. “This connective approach makes all of the difference in an industry with so many small companies at play,” Chawla wrote. “A surprising 89% of freight trucks in the U.S. are owned by carriers with fewer than five total trucks, and 99% of freight carriers possess fewer than 10 total trucks in their fleet. Despite the big business of freight shipping in the U.S., it’s actually a fragmented market of small businesses.”

 

With $40 million for AuditBoard’s risk and compliance toolkit, LA’s enterprise startups notch another win

Daniel Kim and Jay Lee, the two founders of AuditBoard, a Los Angeles-based provider of a risk and compliance software service for large businesses, grew up middle school friends in Cerritos, Calif. It was from their hometown Los Angeles exurb, that Kim and Lee first began plotting how they would turn their experience working for […]

Daniel Kim and Jay Lee, the two founders of AuditBoard, a Los Angeles-based provider of a risk and compliance software service for large businesses, grew up middle school friends in Cerritos, Calif.

It was from their hometown Los Angeles exurb, that Kim and Lee first began plotting how they would turn their experience working for PriceWaterhouseCoopers and Ernst & Young (respectively) into the software business that just managed to rake in $40 million in financing led by one of venture capital’s most-respected firms, Battery Ventures.

Kim, who had moved on from the world of the big four audit firms to take positions as the head of global audit at companies as diverse as the chip component manufacturer, International Rectifier and the surf and sportswear-focused clothing company, Quiksilver, had complained to his childhood friend about how little had changed in the auditing world since the two men first started working in the industry.

For Kim, the frustration that systems for accounting for risk and compliance — requirements under the Sarbanes Oxley Act passed in 2002, were still little more than Excel spreadsheets tracking information across different business lines.

He thought there had to be a better way for companies to manage their audit and compliance processes. So with Lee’s help, he set out to build one. The two men touted the company’s service and its ability to create an out-of-the-box system of record for all internal audit, compliance and risk teams.

“It had been ten years since I had left audit. I couldn’t believe there wasn’t a software for compliance and risk,” Lee said. “Companies still manage Sarbanes-Oxley in Excel.”

There are other tools out there, IBM has OpenPages and ThomsonReuters developed a tool for audit and risk and compliance, but these software services pre-dated Sarbanes-Oxley, and were not made with a modern organization in mind, according to Lee and Kim.

The company counts major clients like TripAdvisor, Lululemon, HD Supply, Express Scripts and Spirit Airlines, among its roster of customers and will use the funding led by Battery to further expand its sales and marketing and product development efforts.

“We were impressed with AuditBoard’s product and its customer traction. With more CFOs now turning to dedicated, cloud-based software tools for various tasks, from ERP to tax compliance to procurement, we see a big opportunity for AuditBoard to continue to grow,” said Michael Brown, a general partner with Battery Ventures and the latest board member on AuditBoard’s board of directors. “We have invested before in similar companies that sell technology to CFOs — ranging from Avalara* and Intacct* to Outlooksoft* and Bonfire*– and we are excited to partner with Daniel, Jay and their team, who have already built a significant business in a short amount of time.”

AuditBoard raised a small seed round from friends and family, and followed that up with Donnelly Financial Solutions, a strategic investor who partnered with AuditBoard in 2017 to further develop its Securities and Exchange Commission reporting and Sarbanes-Oxley toolkit.

Now, AuditBoard joins a growing list of Los Angeles business-focused software companies that are beginning to scale dramatically in the city.

Long known for its advertising, marketing, and entertainment technology companies, large business-to-business software vendors are cropping up across the Los Angeles region. In addition to AuditBoard’s big round, companies like ServiceTitan, which raised $62 million in funding through an investment round led by Battery Ventures earlier in the year, are also making a splash in the Los Angeles business tech scene.

Earlier big rounds for companies like InAuth, the security firm; Factual, a location-based targeting service; PatientPop, the management tool for physicians offices; RightScale, a cloud management and cost optimization service; and Oblong Industries, a collaboration and computer interface developer, all speak to the breadth of the business-to-business talent that’s emerging from Hollywoodland.